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Tuesday, May 23rd
Today the GBP/USD pair once again came under influence of negative events that have triggered another wave of risk-aversion sentiments across the board. Today it became known that several explosions occurred in Manchester arena, UK, which have already been recognized as a terrorist attack. Soon after the tragedy the UK PM Theresa May made a statement that UK government will do everything to get full details of the Manchester explosions and also expressed her condolences to the families of the victims. Over the last hours, the pair was trading in south direction, as investors continue to digest recent events, keeping the pair under pressure below the level of 1.3000. However, ongoing weakness of the US dollar is limiting pair’s further downside. Moving on, now immediate focus shifts toward UK inflation report hearings, which will take place in the session ahead, while data from the US housing market will also bring some impact on the pair in the NA session.
The EUR/USD pair met fresh offers in early Europe, erasing part of its yesterday gains after quiet Asia. Yesterday the shared currency received strong support from Chancellor of Germany A.Merkel, who stated that the euro is "too weak" and hence it makes German products cheaper, thereby allowing the main currency pair to refresh its half-year tops at 1.1263 level. However, seems that euro bulls were unable to retain its positions and the pair retreated a few pips lower, ignoring broad risk-off sentiments and upbeat German data, as the greenback performed another attempt to correct against its main competitors. Today we have a busy economic calendar ahead with a flurry of macroeconomic reports from Germany and New Home Sales data from the US, which will be able to provide investors with next short-term trading opportunities.
The USD/JPY pair came under selling pressure this Tuesday, refreshing its 3-day lows at 110.86 level, as risk-off sentiments were a main theme of the Asian session. The pair met fresh offers today following latest headlines of a huge explosion in Manchester, UK, which was considered as a terrorist attack, thereby increasing demand for safe-haven assets, such as the yen. Moreover, political uncertainty in the US remains at its full swing, additionally weighing on the US dollar as of late. Now traders turn their attentions towards the bloc of US macroeconomic releases, featuring New Home Sales that will provide fresh impetus in NA session, while broad risk trend will continue to drive the pair through European session.
Bitcoin extends its enormous north directed rally, having spiked its psychological level of 2000 on Monday. Yesterday the cryptocurrency gained more than 8%, refreshing its historical highs at 2227.00 spot. Such huge movement was a response to the news that Ledger Holdings, the parent of the bitcoin options exchange LedgerX, managed to attract financing for 11.4 million USD, and is now awaiting the official approval of the US Commodity Futures Trading Commission (CFTC) to operate as the first US Regulated exchange and clearing house for digital currencies. Also worth adding, rally of the bitcoin from the area of $ 1200, seen during the last couple of months, was caused by increased trading activity of virtual currencies in Japan and news that bitcoin has become a legal tender in the country.
The main events of the day:
German Ifo Business Climate Index – 11.00 (GMT +3)
UK Inflation Report Hearings – 12.00 (GMT +3)
US New Home Sales – 17.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1118 R. 1.1322
USDJPY S. 110.59 R. 111.95
GBPUSD S. 1.2924 R. 1.3080
USDCHF S. 0.9656 R. 0.9804
AUDUSD S. 0.7406 R. 0.7522
NZDUSD S. 0.6875 R. 0.7057
USDCAD S. 1.3452 R. 1.3564
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